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Web site spends less, aims for break-even
Published February 4, 2002
The official U.S. Web site of the Salt Lake City Winter Olympics will gross just one-third the ad revenue of its Sydney Games counterpart in 2000, yet it stands to be more of a financial success.
Quokka Sports produced and marketed Sydney's ambitious nbcolympics.com in 2000, spending a reported $30 million on it and grossing $18 million in ad revenue, $12 million of it in cash. The revenue shortfall helped drive Quokka out of business early in 2001.
Microsoft's MSN Web company and its joint venture, MSNBC, had only three months to build the Salt Lake site, and set a goal of breaking even — selling enough sponsorships and ads to offset the $5 million to $6 million operating budget. Dependable sources say the site grossed about $6 million.
The payoff for Microsoft is the tremendous exposure it gets as the official online producer and content provider to the Games, with no fee involved.
"We had a certain bar we had to reach at the executive level at Microsoft, and to be able to pull it off this way with few resources is stunning," said Ona Karasa, MSNBC executive vice president and general manager. "MSN can leverage the technology of the site, including its 'Next Generation Ad Products,' throughout the network, and olympics.com is one of the first showcase tests of those."
Officially, the site is a co-production of the Salt Lake Organizing Committee, NBC, MSN and msnbc.com. Versions of it can be reached at saltlake2002.com and nbcolympics.com.
"Gold-level" sponsors — with permanent home-page placement — include Chevrolet, General Electric, Qwest and Xerox, in deals worth close to seven figures.
There are no other designated sponsor levels, but AT&T, Office Depot, Kleenex, Universal Pictures, McDonald's, Visa and Hallmark have made low-six-figure buys, some of them geared more toward ad impressions than sponsorship presence.
The site features MSN's versions of several new ad technologies, including "fly-out" ads that offer pop-up elements when users scroll over them, data-scrolling ads and "showcase" ads that can change to three different looks with the click of a mouse.
The site is using full-page ads that appear for 10 seconds between text pages. Users and even sponsors complained about the original 30-second length, Karasa said. "Some of the ad types have worked terrifically and some have been modified based on sponsor feedback, but all of these were what got the revenue streams we were looking for."
Quokka predicted tens of millions of unique visitors in 2000 but received fewer than 10 million. Karasa predicted the current site would get 14 million between its November launch and the end of March.